Wall St. slams furniture retailer Stor for red ink bath, sales drop.

Wall St. slams furniture retailer Stor for red ink bath, sales drop

Getting hammered on Wall Street and at the cash register is City of Industry-based Stor Furnishings International Inc., the home furniture retailer.

Stor, which raised $16.7 million when it went public at $8 a share in April of last year, last week traded in the penny-stock range, at 87.5 cents bid in the over-the-counter market.

Lousy earnings are the reason for the stock-price fire sale: For the fiscal fourth quarter ended March 29, Stor reported a loss of $7.33 million on sales of $13.08 million, compared to a loss of $1.01 million on sales of $14.94 million in the year-earlier period.

For the year, Stor reported red ink of $10.75 million on revenues of $70.39 million, compared with a loss of $4.95 million on revenues of $65.65 million the previous year.

Retail sales have been weak in Los Angeles County, where Stor has three outlets. In 12 months ended with April, total retail sales have climbed a scant 0.9 percent in the county, even before adjustment for inflation.

The slow sales have evidently knocked Stor expansion plans for a loop. In a prospectus printed for the IPO last year, investors were told that Stor planned to open two "supercenter" stores by the end of March and four more by next March.

Instead, Stor now has no firm plans except to open a store in Houston by fall, according to its latest quarterly report.

And for Stor, things could get worse: The $18.7-billion-in-sales Swedish home furnishing retailing giant Ikea -- pioneer of the large, high-volume furniture-store concept -- is sniffing around to open three new stores in the Southland, adding to the huge, 238,000-square-foot store it launched in Burbank last year.

That could lead to head-to-head competition between the two similar retailers. In the Southland, Stor operates its three existing stores, which are high-volume outlets in Torrance, Tustin and the City of Industry. The 150,000-square-foot Stor outlets sell affordable, European-style furniture, appliances and accessories.

Now Ikea is looking at a site in Carson -- close to the Stor in the City of Industry.

Ikea insists its new locations are not intended to drive Stor out of business. Ikea officials chose Southern California store locations before coming into the region, and the selection of the Carson site had nothing to do with where a competitor's stores were located, said Cynthia Neiman, marketing manager for Ikea West, the Torrance-based regional subsidiary of Ikea.

Ikea is also opening a store in April 1992 in Fontana, Neiman added.

The Burbank Ikea store is still able to compete for Stor's customers, though, because Ikea customers come to Burbank from as far away as Torrance, Long Beach and Orange County, said Ikea West President Rene Hausler.

PHOTO : Stor in Torrance: Ikea is applying the pressure